Insurers are experimenting with emerging technologies in 2021, and personal lines carriers, as they often do, are leading the way in innovation.
It’s usually easy to theorize the value that new technologies can provide to insurers, but implementing and using those technologies can involve unforeseen challenges. That’s one reason Novarica regularly hosts Special Interest Group meetings—so that insurers in our Research Council can directly share their experiences and lessons learned to establish new best practices for implementing new technology.
We had the opportunity to host nearly 30 insurer executives at our Personal Lines Special Interest Group meeting. We framed the conversation with Novarica’s 2021 Emerging Technology in Insurance Report. The technologies that are the highest priority for personal lines insurers generated the most discussion, and the group learned several insights from insurers who shared their experiences:
- Artificial Intelligence: Property/casualty insurers are actively pursuing machine learning, unstructured text, and image recognition implementations. Sometimes these technologies go hand-in-hand: one insurer reported they’d had great success implementing image recognition and unstructured text to automate the authentication of supporting documents required for endorsements.
- Big Data: Understanding risk is at the heart of insurance, so data and analytics are top of mind for personal lines insurers. Big data technology is changing rapidly as more insurers shift data warehouses to cloud data platforms like Redshift and Snowflake. Several insurers indicated that the power of these platforms could free substantial time for actuaries and analytical teams, cutting down on time spent gathering or massaging data.
- Low-Code/No-Code Platforms: These development tools are relatively new to insurance, but more than half of insurers have already deployed or are piloting them. These tools can cut costs and improve collaboration on Agile teams, but insurers stressed that selecting use cases of appropriate scope was key. One insurer noted that using low-code platforms allowed IT to take a leadership role on projects; this saved time defining project specs but required business users to adjust to the coequal dynamic and generated some pushback.
- Robotic Process Automation: Insurers reported that automation tools like UiPath help eliminate rekeying and other time-consuming processes that legacy system limitations impose. RPA helped operations at one insurer whose resource costs had been driven up by supporting those legacy processes. Insurers who allocate costs on a functional basis may need to remember that spending money in one department can save more money in another.
Experimenting with and implementing emerging technologies is a constant learning process—one reason why Special Interest Groups always generate fascinating conversations. Please feel free to get in touch with me to join our next meeting. Details and registration for all our meetings can be found here.
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